Bangladesh’s export to China reached a three-year low of $677 million in the last fiscal year due to a failure to capitalize on duty benefits provided by Beijing.
The Export Promotion Bureau (EPB) data revealed that if the earnings from the pandemic hit 2019-20 were excluded, the receipts for 2022-23 would be the lowest in a decade.
The limited variety of products in the export basket and a lack of intermediate goods and technology products have hindered efforts to increase exports to China, which grants duty-free entry to 98% of items on its tariff schedule.
In FY23, Bangladesh’s shipment to China declined by 1 percent compared to the previous year, at $683 million.
Garments and textiles accounted for 60% of the earnings, with readymade garments typically making up 85% of national export receipts.
Bangladesh’s trade imbalance with China is widening, with local businesses importing $19 billion worth of goods from China, primarily machinery and parts, cotton, fabrics, plastics, and pharmaceutical products.
Despite challenges, some experts see opportunities for Bangladesh’s apparel industry to increase shipments to other countries amid China’s focus on its domestic market due to the ongoing trade war with the US and Europe.
The lower export growth of leather to China is attributed to Chinese buyers offering uncompetitive prices, citing compliance issues.
Bangladesh exports raw hides and skins to China, amounting to $52.85 million in FY23.
The similarity in major export products and the lack of raw materials and intermediate goods required by China have also impacted the country’s shipment volume.
While China offers duty benefits to thousands of Bangladesh’s products under the Asia Pacific Trade Agreement, the higher value-addition requirement hinders the full utilization of these benefits.
Bangladesh needs to focus on producing products that China imports to boost exports to China, and compliance with Chinese regulations is crucial.
Although live fish and crab exports grew, the shipment dropped due to China’s imposition of strict compliance rules following the Covid-19 pandemic.
Currently, the EPB has not formally submitted any recommendations on how to make the most of the duty benefits extended by China, but they share outcomes and meeting minutes with higher authorities, aiming to address the challenges faced in exporting to China.
